Red Flags in a Request for Proposal (and What to Do About Them)
By Strategies & Voices Editorial Committee
January 18, 2023 | 8-minute read
Business of Law Firm and Practice Strategy and Planning Content Type Blog Post Additional Options Content Level: Essential
Receiving a formal request for proposal (RFP) is an opportunity for a firm to build or expand a relationship with a client. By developing a compelling response, the firm can highlight its strengths, distinguish itself from its competitors and demonstrate the value it offers.
Turning a proposal into a winning business development tool often requires a great deal of effort from many individuals and teams in the firm, including marketing, business development, conflicts and intake, accounting and pricing, human resources, diversity, general counsel, IT and the responding attorneys. Before pursuing a proposal opportunity, it is important to evaluate whether the proposal is likely to be successful and worth the effort of so many internal stakeholders.
Unfortunately, many formal RFPs are fraught with red flags. While some red flags may not be deal breakers for the opportunity, their presence means the firm should proceed with caution and handle them strategically. If the red flag indicates that the firm is unlikely to win the work, the proposal team should encourage the stakeholders to focus their efforts on opportunities that are more likely to be successful.
Common Red Flags
1. The RFP arrived cold.
The issue: If an RFP unexpectedly arrives and there is no known relationship with the requesting organization, the firm should consider whether it is worth developing a response. RFPs that are addressed generically — or worse, to an attorney who does not work at the firm — show that the requestor is not familiar with the firm and may have merely distributed the RFP widely, haphazardly or just to a prescribed number of firms based on their own internal procurement requirements, which diminishes the firm’s chance of success.
What to do: Before going too far, quickly scan the RFP to see if it’s a good fit for what the firm does. For example, is the request tailored to legal services, or is it a catch-all, generic procurement document designed to purchase physical goods? If it is an appropriate fit, then use a CRM, a firm intelligence tool and/or LinkedIn to see if anyone at the firm has a relationship with someone at the organization. If the RFP lists a designated contact person, reach out to gain insight into how the firm was selected to participate, as well as information that could help the firm tailor its response and increase its chance of winning.
2. The RFP has an unrealistic deadline, or the firm was invited late to the process.
The issue: Proposal deadlines can often be tight, but if the firm is invited to bid when the deadline is imminent or unrealistic, it may not be possible to develop an adequate response. More worryingly, if a firm is invited long after the RFP process has begun (as stated in the RFP timeline), that does not bode well.
What to do: See if the firm has any relationships with key decision makers in the RFP process, and try to find out what’s driving the urgency of the request or why the firm was invited late. Prioritize the most important parts of the RFP to answer in detail and focus the firm’s efforts there. Use boilerplate answers for the rest of the proposal if necessary to meet the deadline; a robust content library or standard language repository will help the proposal team compile these answers efficiently.
3. The firm has repeatedly been unsuccessful with past proposals to the requestor.
The issue: If the firm has not been able to gather insights into why it was not selected for past proposals, or if the firm’s offerings have not changed much since the last loss, it should consider whether its chances for success have recently improved. The requesting organization might only be seeking as many pricing quotes as possible to pressure its incumbent or preferred firm, or it may have no intention of working with other firms it has invited, especially if it has declined to work with them repeatedly in the past.
What to do: Debrief with the organization about past proposals to try and understand the reason for an unsuccessful bid. Talk with the organization to understand the opportunity better and help the firm evaluate the nature of the new request, and if anything has changed at the organization (such as the presence of a new decision maker). If a debrief is not an option, ask the attorney their perspective on continuing to respond despite the lack of a success. A question as simple as, “What should we highlight that we have not in the past?” can uncover new insights into how to respond and may lead to a larger conversation about the continued lack of success, despite the firm’s best efforts.
4. The firm’s internal team is unavailable to help with the proposal.
The issue: Nothing dooms a proposal like not having buy-in or availability from stakeholders within the firm. A thorough vetting of the opportunity and a go/no-go discussion process should stop most of these opportunities before they start. However, if a proposal is moving forward without support from key members of the team, it’s unlikely that the firm will put together a persuasive and winning document — especially if it is a response to a particularly complex or burdensome RFP.
What to do: Be clear during the kickoff call or in the project plan about the resources required to respond to the RFP. Note who will be responsible for what pieces of the response, including the specific areas of the proposal that will require attorney input. Schedule follow-up calls or regular check-ins with key stakeholders to help keep the project on track. Ask the responding attorneys if there are other team members who may be better positioned to provide timely input.
5. The proposal is requested through third-party procurement.
The issue: Third-party procurement organizations make their money by helping clients save theirs; the third party’s fee is often directly tied to cost savings. For example, if a client’s legal services normally would have cost $100,000, and the third party achieves a price quote of $80,000 during the proposal process, the third party will be paid a portion of the $20,000 saved. Therefore, fees will nearly always be the most important decision point in the RFP process, and the firm can expect to go through several rounds of budgeting or reverse auctions to further drive down their rates.
What to do: Have a detailed conversation with the finance team to develop strategic pricing that will not jeopardize either the firm’s competitiveness in the bid or its ability to profit from the work if awarded. Now more than ever, try to learn who the likely competitors are to help inform the firm’s pricing strategy. Establish clear boundaries or “floors” for how low the firm can go in an auction. Be upfront with the responding attorneys about the realities of third-party procurement proposals to help them evaluate whether it’s worth pursuing. Understand that this may be a difficult reality for them, especially for those clients that they have worked with for years or decades.
6. The opportunity is simply not a good fit for the firm.
The issue: There are many reasons an opportunity would not be valuable even if the firm's proposal is successful, whether it’s the likelihood of deeply discounted rates, a service or project that is not within the firm’s expertise or geographic reach, a past relationship with the requestor that was less than positive, the possibility of negative press, or the risk of alienating a current client or a strategic prospective client.
What to do: Have a thorough discussion with the key stakeholders in the firm to weigh the pros and cons of responding to such an opportunity. Remind the team they don't have to respond to everything that comes in the door, and the time they would spend working on an ill-fitting proposal would be better spent taking a client to lunch, reaching out proactively to a contact, or attending a networking event. Enlist the help of business development colleagues to research other potential opportunities where the attorneys’ efforts would be better spent.
Proposals are a powerful business development tool when used wisely and strategically. Before spending significant resources responding to an RFP, a firm should consider the desirability of winning the work, its likelihood of being successful with the proposal and whether any of its concerns are too big of a red flag to continue.
If the firm decides to submit a proposal despite red flags, it should put forth the best effort possible to make the document compelling, while being realistic about the likelihood of success — and then focus efforts on more strategic opportunities in the future.